HOA Funding For New Surfside Legislation
After the Champlain Towers South collapse in 2021, Florida required milestone inspections and a structural integrity reserve study, or SIRS, for condominium buildings three habitable stories or taller. Owners cannot vote those reserves away. Since July 2025 they can vote to pause them for up to two budget years, to pay for repairs the inspection found.
A slew of new legislation has recently come about surrounding condominium building maintenance. After the tragic collapse of Miami’s Champlain Towers South in 2021, lawmakers across the country have introduced new measures to attempt to avoid future disasters. Florida moved first and furthest. Its condo safety law now requires a milestone inspection and a structural integrity reserve study, or SIRS, for buildings of three habitable stories or more in height, the threshold written into Fla. Stat. § 553.899. The first inspection falls due by the end of the year a building turns 30, and where local conditions warrant it, such as proximity to salt water, the local enforcement agency can require it at 25. Fannie Mae and Freddie Mac set their own guidelines on top of that, which decide whether units in an aging building stay financeable at all.
For communities in states with this new legislation passing (FL, HI, CA to name a few), this casts a dark cloud on their existing finances. A 2023 State of the Industry Report for the community association management space highlighted a serious concern among HOAs and condo associations: it found that, although HOAs and condo associations have reserve funds they contribute to, many appear to be underfunded or funded incorrectly. This means most HOAs are prepared for things like planned capital improvements, let alone an extensive list of repairs they could potentially face with these new laws in place.
Finding New Funding
Today, most communities rely on special assessments for unexpected financial burdens. Whether that’s a higher-than-expected delinquency or simply that the planned budget isn’t cutting it, HOAs tend to fall back on the tried-and-true special assessment. But, this hurts the community and, over time, creates distrust amongst homeowners.
Florida law now names the alternative directly. Since HB 913 took effect on July 1 2025, an association required to have a SIRS may fund those reserves by special assessment, by line of credit, or by loan, on approval by a majority of the total voting interests. Borrowing for this work is not a workaround. It is one of the routes the statute sets out.
The statute treats the repairs themselves differently from the reserve account. Funding reserves by line of credit or loan takes the majority vote described above. Funding the work itself does not. Under Fla. Stat. § 718.112(2)(f)2.c.(II), the repair, maintenance or replacement a milestone inspection or a SIRS requires may be financed by a line of credit or a loan without an owner vote, and that money must be immediately available to the board. Goede, DeBoest & Cross, a Florida community association firm, reads the provision the same way in its 2025 legislative summary: repairs required by a SIRS study or milestone study may be funded by a line of credit or a loan without a vote of the owners.
Although special assessments are ultimately the simplest solution to financial hiccups in an HOA, they pose a significant risk, especially considering how costly Surfside legislation is expected to be for coastal condo communities. Remember that Champlain Towers South II recognized the ballooning costs of repair they needed, and their membership was informed prior to the collapse that they would each need to pay a substantial amount of additional assessments (between $80k and $336k) either upfront or over a 15-year commitment to cover $15mil in repairs.
The community was rightfully shocked. Those numbers are insurmountable for many, and while the hope is that other buildings won’t require such extensive repairs, the reality is that this is possible for any condominium building in existence today. It’s up to HOA and condo board members to consider new methods of funding that won’t put their membership into significant financial duress. HOA loans and lines of credit offer financial support without bankrupting homeowners or risking pushback that can delay time-sensitive repairs.
Plan Ahead Now
While only a few states have passed these new laws, others are quickly following suit. It’s important to remember that Florida has the second-highest concentration of community associations in the country and is often the state that sets the legal curve for everyone else. Because this condo tragedy happened in such an influential state, it’s only a matter of time before every state has some kind of legal financial expectations for condo buildings. HOA Loan Services provides guidance and step-by-step assistance for HOAs seeking loans for their communities. Contact us today to schedule your free consultation and get started on your plan to meet future HOA law requirements.
Boards also ask
How do we get an HOA loan?
Five steps. You tell us about the project and send your financials; we review what your association can realistically support and confirm your borrowing authority; we take your project to the lenders most likely to approve a community like yours and bring back competing proposals; your board selects one and completes the approval process your documents require; the loan closes and funds draw as the work proceeds. Most boards spend a few hours of their own time across the whole process. From application to closing it usually runs 30 to 90 days.
Why do associations borrow money?
To fund major capital projects, cover emergency repairs, or avoid a lump sum special assessment that asks every owner for a large payment at once. Waiting is also a decision — deferred work rarely gets cheaper, and an unsafe condition can force the timeline for you.
Should we take a loan or levy a lump sum special assessment?
They fund the same project and feel completely different to owners. A lump sum special assessment asks every owner for a large payment at once, which is where boards meet the hardest resistance and where owners on fixed incomes get hurt. A loan spreads the same cost over years, so the monthly impact per unit is far smaller, and it does not depend on every owner having cash available. The tradeoff is interest: over the life of the loan you pay more in total. Some communities are better served by a phased project or a smaller assessment paired with a smaller loan. We model all of them side by side so your board decides with the same numbers in front of everyone.
How long does it take to get funded?
From application to closing, most HOA loans take 30 to 90 days. The timeline moves with project complexity and how ready your documentation is; a current reserve study is usually the difference.
Tell us about your project.
We will tell you what’s realistic. No upfront cost, no obligation.